George Osborne has raised the prospect of an independent Scotland being forced
to give up the pound as its currency.

The Chancellor refused to say if Scotland could continue using sterling if it voted to leave the UK. The new nation could be forced to join the euro, he said.

Mr Osborne’s intervention in the debate about Scottish independence is likely to be controversial in Scotland, where Alex Salmond, the First Minister, has accused politicians in Westminster of interfering in Scottish affairs.

Mr Salmond wants a vote on independence in 2014. David Cameron’s Government has said it is prepared to give the legal authority for such a vote.

The Chancellor, who is chairing the Coalition committee looking at the referendum issue, warned yesterday that Scotland would be poorer if it broke away from the UK and would face fundamental economic questions such as which currency it would use.

Mr Salmond’s Scottish National Party has said that an independent Scotland would be a member of the European Union. Some lawyers say that would mean a legal commitment to join the single currency.

Mr Osborne said: “Alex Salmond has himself said he’d want Scotland to join the euro and you have to ask yourself is that the currency you want to be joining at the moment? That’s a question that the Scottish people are going to have to ask themselves.”

Pressed to say clearly if he would let an independent Scotland keep the pound, Mr Osborne replied: “Alex Salmond has said Scotland should join the euro. That means giving up the pound.”

The Chancellor warned that the people of Scotland would “lose out” in terms of the economy. “I don’t think Scotland would be as prosperous as it would be as part of the UK,” he said.

Even the debate over independence is harming the Scottish economy, he said, because international companies are “nervous” about investing.

The Government moved to force the issue of a Scottish referendum this week by insisting that Mr Salmond’s majority in Scotland did not give him the authority to call a referendum. The Scotland Office has begun a legal consultation on lending him the power to hold a vote.

Some Liberal Democrat and Labour figures think Mr Cameron’s intervention has boosted Mr Salmond’s cause, while the First Minister said the “ham-fisted” move fuelled support for independence.

Mr Osborne defended the Coalition’s approach, saying it had put Mr Salmond on the defensive. “It has forced Alex Salmond to start to spell out plans that he doesn’t want to spell out,” he said. “It has forced him to come clean about when he thinks a referendum should be held.”

Þ A quango in charge of job creation spent millions of pounds on taxpayer-funded credit cards, including on stays at Las Vegas casinos. Scottish Enterprise staff made £2.3 million of purchases in two years, including more than £500,000 on hotel rooms. Other bills included £10,493 at two restaurants in New York.

A Scottish Enterprise spokesman said much of the job for staff based overseas involved attending exhibitions and events. He said quango employees attracted more than £1 billion of investment to Scotland.